Be the Calm Within the Storm

  • Originally published September 19, 2011 , last updated January 12, 2016
Be the Calm Within the Storm

Remember these headlines from August?

“Stocks Nose-dive Amid Global Fears” — Wall Street Journal
“Stock Market Turmoil: What to Do” — Moneywatch
“Wall Street Pummeled with 513 Point Drop” — Associated Press
"Fear Punches Dow Down 513" — USA Today

Of course you do. You probably fielded more than a few phone calls from clients who feared another 2008-level market meltdown. The real question is how did you respond to this situation? How should you, as an advisor, respond to a crisis — financial or otherwise?

We’ve all heard stories of advisors hiding from their clients when the *stuff* hits the fan. As you might imagine, this is exactly the opposite of what you should be doing. Not only should you be there to take those panicked phone calls and talk your clients off the ledge, but you should have a process in place to proactively reach out to your clients and hold their hands during a crisis.

A recent video from the American College discussed exactly what advisors should be communicating during volatile times.

Surveys have shown that clients who are proactively contacted during a crisis are more willing to move additional assets and send referrals the advisor’s way, and less apt to be looking for a new advisor. That’s because effective crisis communications are an opportunity to:

  • Reassure clients
  • Reinforce prior financial decisions
  • Impress prospects
  • Appear more professional and proactive than other advisors
  • Establish yourself as a go-to resource for clients, prospects, centers of influence and the media

Follow these six steps to create a crisis communication plan that leaves your clients feeling reassured and confident not only in their current financial position, but in you as their advisor.

  1. Define crisis triggers — Determine what events will trigger your crisis communication plan. Examples: 5% market drop, natural disasters, manmade disasters, political events, economic developments, negative news, etc.
  2. Assign team roles — If you have a staff, you’ll be more organized if you determine everyone’s responsibilities ahead of time. If you don’t have any support staff, now is a good time to think about whether you want to hire a freelance copywriter or PR agency to help you.
  3. Assemble your crisis communications database — Your crisis list should include all clients, prospects, centers of influence, ex-clients and media.
  4. Develop key messages — No matter how your message is delivered (e-mail, phone, seminar) it should touch on four important points:

    a) Offer your assessment of the event — summarize what has happened and why that is important to the client.

    b) Offer some perspective — Remind your clients that this has happened before. Perhaps look back at some historical data to give them an idea of what to expect.

    c) Reinforce your core values and principles — i.e. “Principal-protected retirement income should be at the core of your retirement plan.”

    d) Offer some kind of action — The most prudent advice may be for your clients to simply hold tight and do nothing. If that is the case, invite them to tell their friends and family to contact you if they’re looking for answers or reassurance.

  5. Assemble communication materials — Depending on the triggering event, you or your staff may have some research to do. Find articles and analysis from third-party experts, historical charts, videos, anything that will help give you clients some perspective on the event.
  6. Deliver messages — There are many ways to deliver your crisis communications. For example, you could send e-mail updates, personal phone calls to top clients and prospects, staff calls to rest of clients, host a seminar or conference call, web site updates, social media updates, etc.

For annuity advisors a crisis can feel like the best of times and the worst of times. It’s the worst because of the psychological and financial impact it can have on the people you’re in the business of helping. It can also be the best because people are looking for guidance, they’re looking for relief and you can help them. Volatility is the annuity producer’s friend because you have the cure for volatility: the fixed indexed annuity. So don’t hide when the going gets rough. Look at it as an opportunity to reassure your clients and reinforce your core message about safe money with upside potential.